Gemba Capital launches Rs 250 crore Fund II to invest in 'Platform-first' businesses

Gemba Capital, a Bengaluru-based SEBI-registered micro venture capital (VC) firm, has unveiled its second fund with a target corpus of Rs 250 crore.

The fund includes a Rs 50 crore green shoe option, which is aimed at bolstering early-stage 'platform-first' businesses. 

Digital “Platform-first” businesses are those businesses that can create compounding moats through ecosystem creation, network effects or the ability to stack value-add layers.

Investing in 30 early-stage startups

The Fund-II will invest in approximately 30 early-stage startups in three key sectors: fintech, consumer tech, and B2B platforms. 

The firm defines 'platform-first' businesses as those capable of creating compounding moats through ecosystem creation, network effects, or the ability to stack value-add layers.

Gemba Capital plans to make initial investments with a first cheque of Rs 5 crore, reserving 30% of the fund for follow-on investments.

Gemba Capital's Fund I performance

Founded in 2018, Gemba Capital makes strategic investments in the seed and pre-seed stages. 

The firm launched its first fund in 2022 with a corpus of Rs 70 crore, which saw an average cheque size of Rs 2 crore. Fund I was raised through contributions from family offices, founders, and CXOs.

Since its inception, Gemba Capital has backed over 120 founders across more than 50 startups, including notable startups Plum (Insurtech), Grip Invest, Wint Wealth, Strata, Navadhan, Zuper, Showroom, Smartstaff, ClickPost, and LightFury.

Investment approach

Gemba Capital is known for its high-conviction, thesis-led investment strategy. The firm focuses exclusively on pre-seed and seed rounds and makes fewer than 10 deals per year. 

Gemba has developed a proprietary 'Founder Market Fit Framework' to identify and support promising teams. This framework, along with the firm’s collaborative investment approach, has been pivotal in attracting founders and differentiating Gemba from other investors.

Adith Podhar, General Partner at Gemba Capital, said, “Our journey has evolved from investing proprietary capital to running an angel syndicate and then raising and investing from our Rs 70 crore Fund-I. We are now looking to partner with institutional LPs for our Rs 250 crore Fund-II. The Indian early-stage startup ecosystem needs more institutional capital to be deployed through Single-Stage VC funds like us.”

Govind Lohia, Principal at Gemba Capital, highlighted the value the firm brings to its portfolio companies: “Founders recognize the immense value we bring to the cap-table, which sets us apart. The fund has supported its portfolio companies in multiple areas, including customer introductions, fundraising, and strategic planning.”